What sets the rate on a car loan
Each lender prices a car loan for the individual application. Common factors include credit history, income and existing debts, the size of the down payment, the vehicle's age and price, and the length of the term. Broader interest rate conditions also influence what lenders charge.
Because of this, no published rate is guaranteed to apply to you. Advertised or promotional rates often depend on conditions such as a specific vehicle, a short term or strong credit.
APR versus the interest rate
The interest rate is what the lender charges on the balance. The APR is meant to include most required charges as well, expressed as a yearly rate, which makes it a better basis for comparing offers. Ask what the APR includes and whether the rate is fixed for the whole term.
Total borrowing cost
Canadian lenders generally must disclose the total cost of borrowing before you sign. This adds up interest and required charges over the full term. Fees, taxes and add-ons financed into the loan increase it, and a longer term usually increases it too, even when the monthly payment falls.
Compare offers at the same amount and term, then compare total cost. The car loan calculator can show how term changes affect total interest.
Ways that may reduce what you pay
A larger down payment, a shorter term, a less expensive vehicle and a quote from your own bank or credit union to compare against can all help. Checking your credit report for errors before applying is also worthwhile. None of these guarantee a particular rate.